Wednesday, June 21, 2006

"Gramps, what's a download?"

GameDaily has an article on how digital distribution is the next big thing for the game industry with quotes from Bill Gates and Sony's Kutaragi. Meanwhile, Joystiq quotes Activision CEO (from a NY Times article) saying that digital distribution is so far into the future, it's not something to worry about right now.

Cue the dueling banjos... [does a little jig]

I'm going to side with the pro-digi-dist guys on this one. Let's not kid ourselves, we increasingly want immediate gratification and digitally distributed content satisfies the jones better than any retail method. I'm by no means a trend setter but I've enjoyed downloading games from Direct2Drive. The ease of purchase is just too difficult to ignore.

The naysayers point to bandwidth as a roadblock. It's not like the technology isn't out there, it just has to catch up in the US. I've spoken to Korean gamers who download 500MB in less than a minute! As more movie, game and other broadband required content becomes available online, consumers will start demanding faster high-speed. Within 2 years, I predict ISPs will have to offer super-speed access just to stay competitive.

Finally, I'd like to present a tertiary reason why digitally distributed games will be the next big thing: the influx of consumer-generated value. Let's use W. Wright's upcoming game, Spore, as an example. His game is designed as a tool for gamers to create their own content, to be shared with others. So if we monetize the value of the entire experience, perhaps only 20% of it is from the actual retail game. The other 80% is consumer stuff fed into the game from others via digital distribution. This same ratio is probably true of MMORPGs as well. 20% of your enjoyment is from the game itself, 80% from what others brings to the table.

How much of a leap is it to predict that the first 20% will go away within the next couple years? I'm thinking: not much of a hop. Game companies will be facilitators between consumers entertaining themselves. The Korean system feeds off this by offering games digi-disted for free so as to get enough players to make the game interesting. They understand that if you lower the barrier to entry, more players will come in. More players means a more attractive "80%" experience.

The most popular experiences now have no retail in sight and the 80% is everything (which I guess makes it the 100%, heh). Look at the success of NeoPets, MySpace, fantasy sports and online poker; these things are successful partially because there are no initial cost (monetary & effort) to engage with the product. All content is digi-disted and the community is everything. Games are right at the heels of this model.

So in closing, my warmest wishes to the Activision CEO, may his golden parachute be heavily diamond-studded.

Cut the banjos already!

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